Lend Lease Real Estate Investments Ltd v Charter Hall Retail Management Ltd

Judgment 1These proceedings are brought by the plaintiff, Lend Lease Real Estate Investments Ltd ( "Lend Lease Investments" ) in its capacity as Responsible Entity of the Australian Prime Property Fund Retail, to recover what it describes as an "origination fee" from the defendant, Charter Hall Retail Management Ltd ( "Charter Hall" ) as Responsible Entity of the Charter Hall Retail REIT. Charter Hall was previously known as Macquarie Country Wide Management Ltd which was the manager of the Macquarie Country Wide Trust. 2Mr N Cotman SC of counsel appears for the plaintiff and Mr G K J Rich of counsel appears for the defendant. 3ING Real Estate Investment Management Australia Pty Ltd ( "ING" ) owned, as trustee for the ING Retail Property Fund, a portfolio of commercial properties which it wished to sell. The plaintiff was interested in purchasing two of the assets and in the course of negotiations, ING informed the plaintiff that it had received a bid for all of its assets from Colonial First State Pty Ltd ( "Colonial" ). ING indicated a willingness to permit Lend Lease Investments and Colonial to bid for the entire parcel of assets to the exclusion of any other party and Lend Lease Investments and ING entered into an agreement on that basis in November 2009 ( "the Heads of Agreement" ). 4There is no dispute that Charter Hall, in November 2009, expressed an interest in joining in the Lend Lease Investments bid and there were discussions between Mr Tarun Gupta, who is a director of Lend Lease Investments, Mr Steven Sewell, who is the chief executive officer of Charter Hall, and a Mr Francis Dundas, who is the chief investment officer of Charter Hall. The discussions and steps taken involved the following: (1)Mr Sewell indicated that Charter Hall would like to purchase a property known as Manuka Terrace ( "Manuka Terrace" ) and a property known as Mile End Homemaker Centre ( "Mile End" ). (2)Mr Sewell indicated that Charter Hall was willing to pay $30 million for Manuka Terrace and $40.5 million for Mile End. (3)Mr Gupta indicated that the plaintiff was willing to obtain the consent of ING to Charter Hall becoming part of the Lend Lease bidding group. (4)ING indicated that it would require Charter Hall to execute an undertaking as to confidentiality and a deed poll. (5)Charter Hall was willing to sign confidentiality undertakings required by ING (and did so). 5The Heads of Agreement contemplated that the plaintiff would provide what was described as a non-binding bid to ING by 8 December 2009. A similar agreement between ING and Colonial apparently required Colonial to do the same and ING was required by 15 December 2009 to determine whether either bid was acceptable to it, and if so, which was the preferred bid. The Heads of Agreement provided for completion of the transaction four weeks after the date of notification that Lend Lease Investments was the preferred bidder or 28 February 2010, whichever was the later. It was later extended to 5 March 2010 (see paragraphs 37 and 38 of Mr Gupta's affidavit dated 17 October 2011). 6I will shortly describe further what occurred between 30 November 2009 and 8 December 2009 as between the plaintiff and Charter Hall, but importantly, the plaintiff did submit a bid to ING on 8 December 2009 and ING did indicate by letter of 15 December 2009 that the Lend Lease bid was the preferred bid. The bid submitted by Lend Lease Investments included a letter from Charter Hall to ING dated 8 December 2009 in which was included the following (see pages 475-476 of Exhibit A2): "Pursuant to the Confidentiality Undertaking, LLREIL has provided us with information relating to the following properties of the ING Retail Property Fund Australia ( INGRPFA ), with the two following properties (the MCW Properties ) intended to be acquired by Perpetual Limited as custodian for Macquarie Country Wide Trust ( Macquarie Country Wide Trust ). Manuka Terrace, ACT; for a purchase price of A$29.7 million and Mile End Homemaker Centre, SA for a purchase price of A$40.095 million We confirm that an acquisition of the above two "MCW Properties" was discussed and formally approved today by the Board of Macquarie Country Wide Trust." 7From 16 December 2009 until 5 March 2010, there was much negotiation between ING and a team of people representing the interests of the Lend Lease bidding group, including Charter Hall, and on 5 March 2010 contracts for sale of land were entered into by which ING sold all of the assets for $1.4 billion. Included in the sale of assets was a sale of Manuka Terrace to Charter Hall for $29.7 million and a sale of Mile End to Charter Hall for $40.095 million. 8Mr Gupta admits that in his discussions with Mr Sewell and Mr Dundas in November 2009, he encouraged Charter Hall to increase its indicative price to $30 million for Manuka Terrace and $41.5 million for Mile End and that he did not, at any time before 2 December 2009, indicate to Charter Hall that the plaintiff wanted to be paid a fee by Charter Hall. Mr Gupta says that he wanted to be sure that Charter Hall was prepared to pay a realistic amount for the two properties before accepting Charter Hall as a member of the Lend Lease bid and he says that as soon as he was comfortable that Charter Hall was prepared to pay a realistic sum (which had occurred on 30 November 2009) he intended to raise the issue of the fee, which he did, he says, on 2 December 2009. 9Mr Gupta says that on 2 December 2009 he and Mr Sewell had a telephone conversation to the following effect (see paragraph 21 of Mr Gupta's affidavit of 17 October 2011): "Me: ' We will be charging Macquarie a 1% origination fee.' SS: ' What does that mean? Is that 1% on top of the price we are paying?' Me: 'No, the overall cost will stay the same - it will come out of the total price you have agreed to pay so you will be neutral. You will stay pay $30 million for Manuka and $40.5 million for Mile End. The 1% will come out of the price and ING will be offered a net price of the fee.' SS: 'That's generous of you guys. If it was Macquarie, it would have charged a 3% fee.' " 10On 8 December 2009, Mr Sewell sent to Mr Gupta a letter which was in identical terms to the letter which was included in the Lend Lease bid (referred to in [6] above), save for the following (see page 463 of Exhibit A2): "Manuka Terrace, ACT; for a purchase price of A$30 million and Mile End Homemaker Centre, SA for a purchase price of $40.5 million" It will be observed that the amounts referred to in that letter were the same amounts that I have referred to in above. 11There is no dispute that following receipt of the letter referred to in [10] above, Mr Gupta emailed Mr Sewell and Mr Dundas (see page 470 of Exhibit A2) and said: "Steven, Scott I have just noticed the pricing is incorrect, as per our discussions, Lend Lease will be changing [sic] MCW a 1% origination fees [sic]. Therefore, the price ING will be getting: ING LLC Origination Total MCW Price Manuka $29.7m $0.3m $30m Mile End $40.095m $0.045m $40.5 Please amend the letter as per ING pricing above and send back, our bid is due 5pm, so please expedite Sorry, I read your earlier letter on blackberry and didn't pick it up" 12There is no dispute that within a very short time of the email referred to in [11] above, Mr Sewell sent a new letter in the form of the letter (as set out in [6] above) which was included in the Lend Lease bid which contained the figure of $29.7 million for Manuka Terrace and $40.095 million for Mile End which I shall refer to as the " net price " (ie net of the origination fee). I shall refer to the $30 million for Manuka Terrace and $40.5 million for Mile End as the " gross price ". 13Clauses 2.2(a)(i)-(ix) of the Heads of Agreement provide that Lend Lease Investments and each "Bidding Party" (defined in clause 1.1 as "a member of the Bidding Group who makes a bid in accordance with these Heads of Agreement") acknowledge and agree to a number of matters; and clause 2.2(b) provides, inter alia, that as a condition precedent of lodging its bid and having it considered, Lend Lease Investments must procure a "Bidding Party" to provide written acknowledgement directly to each party to the Heads of Agreement (other than Lend Lease Investments) that confirms its agreement to be bound by clauses 2.2(a)(i) to 2.2(a)(ix) and each warranty, representation, acknowledgement and agreement which Lend Lease Investments provides (on its behalf) in the Heads of Agreement. 14Pursuant to clause 2.2(b) of the Heads of Agreement, Charter Hall sent an email on 8 December 2009 enclosing a signed Deed Poll in favour of ING in which Charter Hall acknowledged and agreed, inter alia , that (see page 462 of Exhibit A2): "our participation in the process contemplated by the Heads of Agreement and submission of a bid in accordance with the Heads of Agreement is subject to the agreement by each Bidding Person to the matters set out in clauses 2.2(a)(i) to 2.2(a)(ix) of the Heads of Agreement;" In the same Deed Poll, Charter Hall also agreed: "to be bound by each warranty, representation, acknowledgement and agreement which the Lend Lease has provided under the Heads of Agreement." 15Clause 5.4(a) of the Heads of Agreement provides that (see page 19 of Exhibit A1): "If LL or a Bidding Party is the preferred bidder, subject to clause 6, the Parties and the preferred Bidding Parties must each use their best endeavours (and LL must procure that the Bidding Parties use their best endeavours) to negotiate in good faith with each other and to have final documents (containing those further terms that the Parties agree) entered into by the Deal Date" 16As I have noted, the Lend Lease bid went forward and in due course Charter Hall obtained Manuka Terrace for $29.7 million and Mile End for $40.095 million. Charter Hall has not paid the origination fee which Mr Gupta informed Mr Sewell would be required to be paid as the origination fee. 17The plaintiff's case is that by virtue of: (1)the conversation on 2 December 2009 between Mr Gupta and Mr Sewell to which I have referred; (2)the existence of the Heads of Agreement and the acknowledgement of its terms by Charter Hall and Charter Hall's agreement to be bound by its terms; (3)the inability of Charter Hall to progress its purchase of the two properties it was interested in purchasing without joining the Lend Lease bidding group (ie with the consent of the plaintiff); (4)the alteration of the gross price to the net price in the two letters from Charter Hall of 8 December 2009; and (5)the provision by Charter Hall of the two letters of 8 December 2009, in particular the second letter of that date; there was formed a contract between the plaintiff and Charter Hall for the payment of the origination fee if the Lend Lease bid was accepted and the two properties were sold to Charter Hall. The plaintiff alleges that the fee was payable on the settlement of the purchases, or alternatively, within a reasonable period after the date of settlement. 18The defendant denies that a binding agreement was formed at any time in December 2009 as alleged by the plaintiff, or at all. It accepts that there was a discussion about a fee but contends that those discussions did not constitute an agreement. The defendant emphasises the uncertainty of whether the properties would be available, and the freedom of the plaintiff to withdraw from the arrangements with it and with ING. 19The plaintiff propounds an alternative case against the possibility that its case for a concluded contract is not accepted, and asserts that the defendant is estopped in all the circumstances from denying that there was a contract. The plaintiff relies on the principles discussed in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387. 20The defendant propounds an alternative case against the possibility that its claim that no contract was formed is rejected, and asserts that s 9(2) of the Property, Stock and Business Agents Act 2002 (NSW)( "the PSBA Act" ) prevents the plaintiff from recovering the origination fee. Section 9 of the PSBA Act is in the following terms: "(1) A corporation must not act as or carry on the business of (or advertise, notify or state that the corporation acts as or carries on the business of or is willing to act as or carry on the business of) an agent unless the corporation holds a corporation licence. Maximum penalty: 200 penalty units. (2) A corporation is not entitled to bring any proceeding in any court to recover any commission, fee, gain or reward for any service performed by the corporation as an agent unless the corporation was the holder of a corporation licence at the time of performing the service." Factual contest 21There is no dispute that Mr Gupta raised the matter of the origination fee before Charter Hall submitted its letters of 8 December 2009, one with the gross price and one with the net price. There is a dispute as to whether the first conversation about the fee occurred on 2 December 2009 as Mr Gupta asserts or on 8 December 2009 as Mr Sewell asserts. There is a dispute as to whether Mr Sewell raised with Mr Gupta in that conversation the question of whether a similar fee would be charged to other members of the Lend Lease bidding group. Mr Sewell asserts that he did raise that question then and Mr Gupta says that Mr Sewell raised that question much later. 22I am inclined to view the two factual disputes referred to in [21] above as being unimportant to the issue which I am required to resolve because there is no issue that Charter Hall sent its proposed bid letters of 8 December 2009 after it had been informed that a fee was required. So far as the second dispute is concerned, there seems to be a thread in Mr Sewell's approach that Mr Gupta had misled him in saying that other members of the Lend Lease bidding group would be charged a fee when, according to Mr Sewell, they were not. Mr Gupta denies that he said that all participants would be charged a fee - he says that what he said (in February or March 2010) was that all external parties (ie other than Lend Lease entities or funds with which Lend Lease was connected) are being charged the fee. Mr Gupta also gave evidence that Arkadia Retail Property Pty Ltd ( "Arkadia" ), a late entrant to the Lend Lease bidding group (ie after December 2009), was the only other external participant and that it was in fact charged a 1% fee, although the fee was raised by Lend Lease Investment Management Pty Ltd ( "Lend Lease Management" ) and not the plaintiff (see Exhibit 2). It is no part of the Charter Hall defence that it was misled or only agreed to pay the fee because of what Mr Gupta allegedly said about other members of the Lend Lease bidding group. 23On the assumption that it is necessary for me to determine whose evidence I accept - I prefer and accept the evidence of Mr Gupta. He gave his evidence very carefully and I do not think he was shown to have said anything that was false or incorrect. I gained a positive impression of his credibility. 24So far as Mr Sewell was concerned, I gained the impression that he was unreliable for the following reasons: (1)When cross-examined about whether he had obtained Charter Hall board approval for the bid, he sought to withstand the obvious inference that a reference to a fee to Macquarie Asset Services Ltd was in addition to the price to be paid for the two properties: see T118.35-39, T119.44-47, T121.3-17 and T122-T123. (2)He asserted that the Charter Hall board had, on 3 March 2010, approved the completion of the purchase of the two properties but had not approved the payment of the 1% origination fee even though the board minutes do make clear that the proposal included the origination fee and do not contain any mention of the fee being rejected by the board. (3)He asserted that Charter Hall had been doing Lend Lease "a favour" (see T130.10-24) by lending its balance sheet to purchase the two properties - this is far-fetched given the undoubted interest of Charter Hall in acquiring the two properties. It was Charter Hall, who through an intermediary, approached Lend Lease Investments. He admitted that the properties had been negotiated at very competitive pricing, probably below the market price (see T131.22-24) and that the properties have "revalued strongly" since acquisition (see T130.39-40). (4)His evidence that he had not heard about the origination fee proposal until 8 December 2009 was undermined by the existence of a draft letter produced on discovery by Charter Hall and dated 7 December 2009. The attempts that were made by Mr Sewell to explain why the letter in Exhibit C was not created on 7 December 2009, notwithstanding the fact that it was sent as an attachment to an email bearing the date 7 December 2009 (see Exhibit C) and that there are document creation pages which point to it having been first created on 4 December 2009 (see the MFI 2 part of Exhibit 3) were not successful in my view. (5)His answers in cross-examination at T128.21-T130.3 contained evasive aspects and the introduction of the notion that he had communicated to Mr Gupta that he had no authority to approve a $705,000 origination fee. There is no evidence to support the contention that he did not have authority or that his agreement to the origination fee was expressed to be subject to board approval, and as I have noted, nor is there any evidence that the Charter Hall board refused to ratify the agreement he had in fact reached, on behalf of Charter Hall, with Mr Gupta, on behalf of Lend Lease Investments. Further, when Mr Gupta reminded him in February 2010 that he had agreed to pay a $300,000 fee for Manuka Terrace (it was only the fee in respect of Manuka Terrace that was in issue because of complications due to tenancies at the mall), he did not dispute that: see T133. Was a contract formed? 25I was referred to a number of cases dealing with the need for there to be an intention to contract for an agreement to be legally enforceable: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149, and Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309. Although the judgment of Hammerschlag J in Western Export Services Inc v Jireh International Pty Ltd [2010] NSWSC 622 was not mentioned, I think at [195]-[199] of his Honour's judgment there are set out a helpful summary of the principles and the relevant cases which I gratefully adopt: "195 For an agreement to be legally enforceable there must be an intention to contract, that is, an intention to create binding legal relations. 196 Whether parties have an intention to create contractual relations depends on an objective assessment of the state of affairs between them as distinct from the identification of any uncommunicated subjective reservation or intention that either may have harboured. Intention in this context means that which would be objectively conveyed by what is said or done in the circumstances in which the statements and actions happened: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105-6; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-549. 197 In ascertaining the intention of the parties, whether from a series of communications or from a single document, regard can be had to the commercial circumstances in which the parties exchanged their communications or arrived at the document and to the subject-matter of the putative contract. The objective intention of the parties is fact-based, found in all the circumstances. Regard can also be had to the conduct of the parties after the occasion of the putative contract, to cast light on the meaning of the communications in question and otherwise on whether they intended immediately to be contractually bound: Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at 69 per Giles JA; see generally Michael Furmston and GJ Tolhurst Contract Formation: Law and Practice (2010) Oxford University Press, Ch 10. 198 The existence of a contract is a consequence which the law imposes upon, or sees as a result of, what the parties have said and done. Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but it is not, or not always, the determining factor: Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 330 per Mahoney JA, 337 per McHugh JA. 199 It has been said that in commercial or business agreements an intention to create legal relations is presumed and must be rebutted by the party seeking to deny it: see Michael Furmston and GJ Tolhurst at 10.02, 10.33. However, in Ermogenous v Greek Orthodox Community of SA Inc the High Court expressed doubt (at least in the context of that case) about the utility of using the language of presumptions. The court reiterated that a party alleging a contract bears the onus of proving its existence. Undoubtedly, the commercial and business setting in which an alleged contract is concluded, including the presence of valuable consideration, is relevant in an assessment of whether there was an intention to contract." Western Export was the subject of a successful appeal to the NSW Court of Appeal and was overturned (see Jireh International Pty Ltd t/as Gloria Jean's Coffee v Western Exports Services Inc [2011] NSWCA 137) and special leave to appeal to the High Court was refused (see Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45), but the appeal was not concerned with this point. 26In support of its claim that there was no intention to create binding contract, Charter Hall points to the following matters: (1)Charter Hall asserts that the terms of the contract on which Lend Lease Investments relies in paragraphs 20-22 of its commercial list statement were not expressed in the telephone conversation prior to the email exchange on 8 December 2009 or in the email exchange. (2)The absence of formality of the type that would be expected for a $705,000 fee. (3)The communications relied on by Lend Lease Investments did not include a reference to important matters, ie: (a)GST; (b)the time for payment; and (c)to whom the fee would be payable. (4)The commercial circumstances in which the December 2009 communications were not such as to indicate an intention (objectively) to make legally enforceable commitments to one another. In particular, Lend Lease Investments was not committed "at that point in time" to proceed with these transactions - it was quite deliberately "leaving itself the option of backing out of the whole arrangement if it...wished to do so in good faith, for its own commercial reasons" (see T172.31-40), and nothing was said to indicate that the agreement was immediately binding. (5)The subsequent conduct of the parties, namely: (a)Mr Sewell sought to negotiate a reduction of 50 basis points to the fee in late February or early March of 2010 which Mr Gupta rejected but offered a "clawback" arrangement; (b)that Mr Gupta, on behalf of Lend Lease Management, sent a draft letter which included the clawback provision in a letter dealing with the origination fee; the letter deals with GST and when the fee is payable; and (c)that an invoice was sent out by Lend Lease Management to Charter Hall claming the fee. 27The plaintiff has the onus of establishing that a contract was made on 8 December 2009. In my view it has done so. In reaching this view I take into account the conversation between Mr Gupta and Mr Sewell on 2 December 2009, the actions of Charter Hall on 8 December 2009, the terms of the Heads of Agreement and Charter Hall's written consent to the terms of the Heads of Agreement and the following matters: (1)It is clear that Charter Hall wanted to bid for the two properties. It had only two means of so doing, either as part of the Colonial bidding group, or the Lend Lease bidding group. It chose the Lend Lease bidding group. To join that group it had to obtain the consent of the plaintiff since the plaintiff was the Lend Lease corporate entity that had, through the Heads of Agreement, the agreement with ING. (2)Mr Gupta made clear to Mr Sewell that a fee of 1% was required. It is true that Mr Gupta did not say that the fee was to be paid to Lend Lease Investments but objectively speaking, in the absence of some other entity being specified to Charter Hall as the party to whom the fee was payable and given that it was Lend Lease Investments that held the benefit of the Heads of Agreement with ING and whose consent was required. The approach to be taken in determining the identity of a contracting party is set out in Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299 at 304 as follows: "The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract. This is, to a point, a process of construction similar to the task of identifying whether a clearly contractual document (such as a bill of lading) is made with one party or another (such as a shipowner or time charterer): Homburg Houtimport BV v Agrosin Private (at 770) and the cases considered in M Wilford, T Coghlin and J D Kimball, Time Charters 5th ed (2003) London, Lloyds of London Press, Ch 21. Where the documents are silent or ambiguous, but there is undoubtedly a contract, the identity of the parties must be determined objectively from the surrounding circumstances: see Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 174; Protean (Holdings) Ltd (receivers and managers appointed) v American Home Assurance Co (1985) 4 ANZ Insurance Cases 60-683 at 74,055-74,056; Coulls v Bagot's Executor and Trustee Company Ltd (1967) 119 CLR 460 at 477, 478-479 and 486." I think it is clear that the fee would be payable to Lend Lease Investments. (3)It is clear that: (a)the Lend Lease bid might not be accepted; (b)some or all of the Lend Lease entities might choose, acting in good faith, not to proceed with the purchase of some or all of the properties that they were indicating a willingness to purchase; and (c)Charter Hall might, acting in good faith, choose not to proceed with the purchase of either or both of Manuka Terrace and Mile End; but I do not think that this in any way detracts from the proposition that there was agreement that: (d)if the plaintiff included the Charter Hall bid as part of the Lend Lease bid on 8 December 2009; (e)if the Lend Lease bid was accepted by ING on 15 December 2009 as the preferred bid; and (f)if the two properties were the subject of sale after due diligence and enquiries; a fee of 1% of the gross price that Charter Hall had indicated it was willing to offer for the two properties would be paid by Charter Hall. 28Thus the origination fee was contingently payable in consideration of Charter Hall being included in the Lend Lease bid. All of the conditions subsequent were met and the origination fee became payable on settlement of the purchase of the two properties or within a reasonable time thereafter (discussed below). 29I think there is a considerable degree of unrealism about Charter Hall's position and the submissions proffered in support - because not only did Mr Sewell say nothing to indicate he did not accept the payment of an origination fee and Charter Hall signed the acknowledgements required by ING to join the Lend Lease bidding group, but within minutes of receiving Mr Gupta's email on 8 December 2009, he adjusted the bid to a figure net of the 1% origination fee and sought that that figure go forward to ING, emphasizing the extremely close connection between an agreement to join the bid on the conditions specified by Mr Gupta. Further, Charter Hall's submissions would have the origination fee being negotiated at some later time, indeed at a time when settlement of the entire $1.4 billion transaction was about to take place. In fact, at the time of settlement, Mr Gupta was told by Mr Sewell that if he insisted on the fee, Charter Hall would not proceed with the purchase: see paragraph 46 of Mr Gupta's affidavit dated 14 November 2011. 30I have taken into consideration the five points made by Mr Rich (set out in [26] above), but in my view they are of insufficient weight to undermine the plaintiff's case. First, I think it was clear what was being sought by Charter Hall and what Lend Lease Investments wanted in return for Charter Hall being permitted to join the bid. Second, I accept that there was a lack of formality which was no doubt unwise on the part of Lend Lease Investments but Mr Gupta thought he was, in dealing with Mr Sewell, dealing with a man of integrity: see page 294 of Exhibit A1. It is true that GST was not mentioned and the failure to mention it leads to the result that GST is payable by Lend Lease Investments, but since the legislation prescribes by whom the tax is payable, the contract is complete whether GST is or is not specified. The time for payment of the origination fee was not specified but I think it was clear that it was payable when settlement was effected, or if not clear, that it was payable within a reasonable time following settlement: see Canning v Temby (1906) 3 CLR 419 at 424 per Griffith CJ; see also J E Stannard, Delay in the Performance of Contractual Obligations (2007) at [1.1] for examples of contracts to which this has been applied. I have already noted that although the discussions between Mr Gupta and Mr Sewell did not specify to whom payment was to be made, given that it was Lend Lease Investments that was the party to the Heads of Agreement with ING, there could be no doubt, objectively as at December 2009, to whom the origination fee was to be paid; and see T135.25-T136.13 in respect of Mr Sewell's understanding. 31So far as the argument that Lend Lease Investments was not committed to proceed with the transaction is concerned, it is true that Lend Lease Investments could have withdrawn from the process, but as at 8 December 2009, I think it is clear that Lend Lease Investments was proposing to proceed with the bid and to include Charter Hall in the bid if Charter Hall, with knowledge of the proposed origination fee, wanted to proceed. I think that as at 8 December 2009, Lend Lease Investments agreed to put the bid forward and include Charter Hall but even if it was not, it was offering an opportunity to Charter Hall that if Lend Lease Investments proceeded with the bid and if Lend Lease Investments includes Charter Hall in the bid, then a 1% origination fee would be payable by Charter Hall. Viewed this way, the contract had both conditions precedent and conditions subsequent. The immediacy of the lodgement of the bid by 5pm on 8 December 2009 and the acceptance by Mr Sewell of the need to adjust his figures to the net price from the gross price provide a very clear climate for acceptance of the offer made by conduct, even if there had not already been acceptance of the proposal of an origination fee on 2 December 2009. 32The subsequent discussions with Charter Hall on clawback only arose because Charter Hall sought a reduction of the fee. I do not think Lend Lease Investments' willingness to discuss altering the terms of payment of the fee or even a willingness to alter those terms establishes that no agreement was reached in December 2009. The letter sent as a draft (see pages 971-973 of Exhibit A3) indicates an attempt by the Lend Lease group, with the benefit of legal advice, to alter the terms of the contract and the identity of the Lend Lease contracting party and the invoice sent in the name of Lend Lease Management has a similar character, but these could not undo, in the absence of Charter Hall's agreement to the change, what had been agreed before; and I do not think they establish, either on their own or in conjunction with the other matters relied on, that no agreement had been reached by 8 December 2009. 33Mr Cotman pointed to some aspects of Charter Hall's conduct which supported Lend Lease Investments' contention that there was a binding agreement, namely: (1)The letter at pages 1349-1350 of Exhibit A4 sent by Lend Lease Management setting out the agreement refers to "Lend Lease", but otherwise sets out the terms of the contract asserted by Lend Lease Investments. (2)The absence of any discussions, other than the request to reduce the fee for Manuka Terrace, in which Charter Hall sought to make the contract (that on Charter Hall's case was yet to be made). (3)The internal emails of Mr Sewell and Mr Dundas at pages 1368-1370 of Exhibit A4 suggest an acceptance by them that Charter Hall would be paying a fee. (4)The internal note of Charter Hall, found at page 1371 of Exhibit A4, which records that a fee of 1% was factored into the transaction fee for the purchase. (5)The announcement prepared by Charter Hall in March 2010 for the stock exchange showed a total consideration for the purchase of the two properties as $70.5 million, which included, although not expressly, the origination fee to Lend Lease Investments. (6)The fact that Mr Sewell sought a reduction of "the fee payable to LL" in his email of 3 March 2010 (see page 926 of Exhibit A3). (7)The statement of claim issued in the name of the plaintiff. I think these matters, other than (7), further reduce the impact of the matters relied on by Charter Hall and reinforce my view that the post-contractual conduct of the parties do not support the conclusion that no contract was entered into on 8 December 2009. 34I conclude, therefore, that there was, on 8 December 2009, a binding agreement reached between Lend Lease Investments and Charter Hall for the payment by Charter Hall of an origination fee at 1% of the gross price in the event that Charter Hall purchased Manuka Terrace and Mile End. The amount was therefore $705,000 and should have been paid either on 5 March 2010 or within a reasonable period from that date, which I assess as seven days. 35Given my view that there was a binding agreement reached between the parties, it is not necessary to consider the plaintiff's alternate case on estoppel. Statutory defence 36I turn now to s 9(2) of the PSBA Act . To be barred from recovery of a fee, a corporation which does not hold a real estate licence must have performed a "service" as an "agent". "Agent" is defined in the PSBA Act to include a "real estate agent", and a "real estate agent" is defined as follows: " real estate agent means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), carries on business as an auctioneer of land or as an agent: (a) for a real estate transaction, or (b) for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or (c) for the introduction, or arranging for the introduction, of a prospective purchaser, lessee or licensee of land to another licensed agent or to the owner, or the agent of the owner, of land, or (d) collecting rents payable in respect of any lease of land and otherwise providing property management services in respect of the leasing of any land, or (e) for any other activity in connection with land that is prescribed by the regulations for the purposes of this definition. but does not include a person who carries on business as an auctioneer or agent in respect of any parcel of rural land unless the regulations otherwise provide." Only subclauses (b) and (c) of the definition of "real estate agent" are relied on by Charter Hall. 37The term "real estate transaction" is defined in the PSBA Act as: "the purchase, sale, exchange, lease, assignment or other disposal of land, whether or not an auction is involved." 38There is no question that ING was selling Manuka Terrace and Mile End and there is no doubt that Charter Hall wanted to and did purchase those two properties. I do not think it can be suggested that Lend Lease Investments was acting as agent for ING (and it received no reward from ING). The reward which Lend Lease Investments obtained from Charter Hall (ie the origination fee) was a fee earnt for including Charter Hall in its bid for all of the assets owned by ING provided ING sold the properties to all of the participants in the bid, including Charter Hall. The only "service" that Lend Lease Investments performed and for which the fee was payable was to include Charter Hall as one of the members of the Lend Lease bidding group and that service does not readily fit within the notion of services that a real estate agent performs. It might fit literally within the terms of inducing a person to make an offer to enter into a real estate contract, save that the offer was a collective offer made by the entire bidding group and not one made solely by Charter Hall. There is the added difficulty that it was Charter Hall who approached Lend Lease Investments seeking to be included in the bid, not the other way around - a matter that seems to have some relevance in this area: see Hungier v Grace (1972) 127 CLR 210 at 218 per Barwick CJ and at 224 per Walsh J which is a case dealing with money-lending legislation that utilised "business" in the prohibition on recovery of money lent by an unlicensed money lender. 39Given that s 9 of the PSBA Act creates an offence with criminal sanctions, I have considerable doubt as to whether it applies in circumstances such as these quite apart from the question of whether Lend Lease Investments was "carrying on a business" as an agent. If the definition of "real estate agent" in the PSBA Act is read literally, it would include a purchaser's or vendor's solicitor who negotiates with a vendor's or purchaser's solicitor with a view to inducing the vendor or purchaser to enter into a contract of sale, and that cannot be the intent of the legislation. 40The NSW Court of Appeal has provided instructions on the approach to be taken to provisions such as s 9(2) of the PSBA Act in Farrell v Bannister (1952) 52 SR (NSW) 73 per Street CJ (with whom Owen and Clancy JJ agreed) where his Honour said at 74: "....it seems to me that what the Legislature was prohibiting was the conducting of a business, or something in the nature of a business, such as that carried on by a real estate agent, unless the person conducting that business held a licence under the Act. If he was not carrying on such a business, and if the transaction was one isolated case of acting in the matter of bringing a purchaser and vendor together for the sale of a specific piece of land, then that is not prohibited by the section." See also Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 per Lindgren J and Milne v Coxton Pty Ltd (unreported, Supreme Court of New South Wales, SC 13198 of 1985, Clarke J) BC8700884 at 18-22. 41There is no evidence that Lend Lease Investments has been involved in any other transactions of the kind embarked on with ING whereby Lend Lease Investments, in effect, put together a consortium to bid for all of the assets of ING. There is no evidence that it was Lend Lease Investments' intention to arrange similar consortiums with a fee structure in the future - a matter regarded as of relevance: see Mercer v Dalley [1934] VLR 14. In the absence of evidence to the contrary, I find that the Heads of Agreement entered into with ING was the only occasion on which Lend Lease Investments entered into a transaction of this sort so that even assuming entry into a number of such transactions involves a breach of s 9(2) of the PSBA Act, the entry into one such transaction does not infringe s 9(2) because Lend Lease Investments was not "carrying on the business" of a real estate agent. As the High Court emphasised in Hungier v Grace , citing McCardie J in Edgelow v MacElwee (1918) 1 KB 205 at 206, "'business' imports the notion of system, repetition and continuity..." (per Barwick CJ at 216-217) and "continuity and generality" (per Menzies J at 222). 42Mr Rich contended that not only was a fee sought from Charter Hall but it was also sought from Arkadia. There are, I think, three obstacles in the way of that submission. The first is that there was only one bid to ING and the introduction of Arkadia came about at a later time because one of the bidders dropped out: see T69 and page 700 of Exhibit A2. The transaction, I think, remained a one-off transaction even if it had several components. The second obstacle is that for whatever reason, it was not Lend Lease Investments who charged a fee to Arkadia, but Lend Lease Management. The third obstacle is that the substitution of Arkadia for the original member of the bidding group on one of the properties was organised by Mr Justin Louis, described as Head of Capital Transactions Lend Lease, but not said to be acting as an employee or director of Lend Lease Investments: see page 700 of Exhibit A2. 43I do not think that infringement of the PSBA Act has been established. Conclusion 44It follows that the origination fee of $705,000 is payable. The plaintiff is entitled to interest on that amount in accordance with s 100 of the Civil Procedure Act 2005 (NSW) and rule 6.12(8) of the Uniform Civil Procedure Rules 2005 (NSW). The plaintiff's solicitor should calculate the amount owing so that judgment can be entered for the total amount. 45The plaintiff is entitled to an order for costs on the usual basis, but if any special costs order is sought I will hear the parties on that issue.